Government on course to achieve FY17 disinvestment target: Official

"At a time when the market was not supportive and no new foreign investor was there to buy, buyback was one of the best available options before the Government for disinvestment," DIPAM joint secretary Manish Singh said. Image Source: ZeeBiz WebDesk

The Government has already garnered Rs 23,500 crore by divesting its stakes in public sector units (PSUs) so far in the current fiscal and is hopeful of achieving the fiscal 2016-17 (FY17) disinvestment target of Rs 56,500 crore, a Finance Ministry official said on Wednesday.

"We have already completed disinvestment valued at Rs 23,500 crore so far in the current fiscal. Thus, we are confident of completing the projected disinvestment target of Rs 56,500 crore for the entire fiscal during the two-and-a-half months left before us," Manish Singh, Joint Secretary, Department of Investment and Public Asset Management (DIPAM) under Ministry of Finance, said.

He was speaking to reporters on the sidelines of an event in Mumbai.

According to Singh, buyback of shares undertaken for the first time by central public sector enterprises has fetched Rs 15,000 crore so far in the current fiscal.

"At a time when the market was not supportive and no new foreign investor was there to buy, buyback was one of the best available options before the Government for disinvestment," he said.

"We have done minority stake sale and buyback this time. We have a strong pipeline of 40-odd listed companies. Still, it will all depend on how does the market behave. I mean if the market supports us and gives windows to divest, we will go ahead with disinvestment task assigned to us."

December is slow in terms of activity on the capital market as most of the merchant bankers are on leave during the month, Singh said, adding, "So we are relying more on January for disinvestment to pick up."

Replying to a query, he said earlier it was follow-on public offer (FPO) which used to be the preferred route for divesting stake, but the department has now moved to offer for sale (OFS) model.

"Now we have moved to OFS so there is no loss to the Government and ETF was one of the instruments which helped us to do that," the Joint Secretary said.

The Government-owned Specified Undertaking of the Unit Trust of India (SUUTI) in November last year sold a 1.63% stake in L&T through a block deal to raise Rs 2,100 crore.

Singh said his department was set to go for strategic sell-off for certain state-owned companies for which the Government has already given in principle approval and work was underway for completing their disinvestment within the stipulated time.